Hemming Co. reported the following current-year purchases and sales for its only product. (This is all one question)

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Jan.

1

Beginning inventory

250

units

@ $12.00

=

$

3,000

Jan.

10

Sales

200

units

@ $42.00

Mar.

14

Purchase

400

units

@ $17.00

=

6,800

Mar.

15

Sales

360

units

@ $42.00

July

30

Purchase

450

units

@ $22.00

=

9,900

Oct.

5

Sales

420

units

@ $42.00

Oct.

26

Purchase

150

units

@ $27.00

=

4,050

Totals

1,250

units

$

23,750

980

units

Required: Hemming uses a perpetual inventory system. 1. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. 2. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. 3. Compute the gross margin for FIFO method and LIFO method.

Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.

Perpetual FIFO:
	Goods Purchased			Cost of Goods Sold					Inventory Balance
Date	# of units		Cost per unit	# of units sold		Cost per unit	Cost of Goods Sold		# of units		Cost per unit	Inventory Balance
January 1									250	@	$12.00	=	$3,000.00
January 10				200	@	$42.00	=	$8,400.00	50.	@	$12.00	=	$600.00
March 14	400.00	@	$17.00						50.	@	$12.00	=	$600.00
									350.	@	$17.00	=	5,950.00
													$6,550.00
March 15				50	@	$12.00	=	$600.00	0	@	$12.00	=
				310	@	$17.00	=	5,270.00	40	@	$17.00	=	$680.00
								$5,870.00					$680.00
July 30	450	@	$22.00						0	@	$12.00
									40	@	$17.00	=	680.00
									450.	@	$22.00	=	9,900.00
													$10,580.00
October 5				0	@	$12.00	=	$0.00	0	@	$12.00
				40	@	$17.00	=	680.00	0	@	$17.00
				380	@	$22.00	=	8,360.00	70	@	$22.00	=	1,540.00
								$9,040.00					$1,540.00
October 26	150	@	$27.00						0	@	$12.00
									0	@	$17.00
									70	@	$22.00	=	1,540.00
									150	@	$27.00	=	4,050.00
Totals								$23,310.00					$5,590.00

Determine the costs assigned to ending inventory and to cost of goods sold using LIFO.

Compute the gross margin for FIFO method and LIFO method.